Palladium, gold jump as Russia sanctions unnerve markets

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  • Palladium on track for 3rd monthly gain
  • Gold eyes best month since May 2021
  • Silver up about 8% in February
  • Stocks dip on sanctions imposed on Russia

Feb 28 (Reuters) - Palladium prices surged on Monday after the West slapping more sanctions on Russia over its invasion of Ukraine raised fears of supply disruptions and put safe-haven gold on pace to post its biggest monthly percentage gain in nine.

Palladium was up 5.1% at $2,488.20 by 01:51 p.m. ET (1851 GMT), having scaled a session high of $2,551.50. It was set to post its third consecutive monthly rise.

Russia's Nornickel (GMKN.MM) is the world's largest supplier of palladium, used by automakers for catalytic converters. read more

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"As sanctions increase on Russia and the tensions escalate, it creates a scarcity threat (for platinum metal groups)," said Eric Scoles, market strategist at Blue Line Futures.

The palladium supply deficit could certainly increase if the U.S. is not doing business with the major producers, Scoles added.

Spot gold rose 0.6% to $1,898.25 per ounce, after gaining as much as 2.2% earlier in the session. U.S. gold futures settled up 0.7% at $1,900.70.

Gold, often used a safe-store of value during times of political and financial uncertainty, has risen about 6.5% in February, having soared to an 18-month high of $1,973.96 last week.

"When geopolitical tensions get really high, gold still is the main safe haven asset outperforming the crypto currencies and other even other assets like Treasuries," said Jim Wyckoff, senior analyst at Kitco Metals.

Financial markets slid and oil prices soared as Western allies ramped up efforts to punish Russia with new sanctions.

In response, Russia's central bank on Monday moved to shield the economy as its invasion of Ukraine continued, bolstering other measures including an assurance it would resume buying gold in the domestic market. read more

Spot silver gained 0.5% at $24.31, while platinum fell 1.6% to $1,037.51. Both of them were poised to post monthly gains.

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Reporting by Brijesh Patel in Bengaluru; Editing by Amy Caren Daniel

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